A questions which is frequently asked by Baby Boomer clients is "At
what age should I start Social Security retirement benefits in
order to collect the highest total amount over the course of my
lifetime"
Actually, according to the Social Security Administration (SSA), it doesn't
matter — on average. If you live to the average life expectancy that SSA
calculates for people your age, you will receive roughly the same
amount in total lifetime benefits whether you start receiving at age 62,
at full retirement age, at age 70, or any age in between.
However, monthly benefit amounts can differ substantially. Basically,
you can get lower monthly payments for a longer period of time or
higher monthly payments over a shorter period of time.
As
financial planner, I would advise a client that this question does not
have a "one size fits all answer". Perhaps more importantly, it might
not even be the right question to ask!
Instead of asking "At what age should I start Social Security retirement benefits in
order to collect the highest total amount over the course of my
lifetime", the correct question should be "At what age should I start Social Security retirement benefits in
order to meet my projected cash flow needs and accomplish my personal goals in retirement?"
Furthermore, seeking the highest total amount over the course of your
lifetime involves too many variables including your remaining years on this earth and future changes to Social Security.
Many
people find it helpful to work with a Financial Planner and/or CPA to
work through the many variables involved with this important decision
and receive independent and objective professional financial advice.
